Amersham Pharmacia Biotech

Amersham Pharmacia Biotech is a leading global provider of biotechnology systems, products and services used in gene and protein research, drug discovery and development, and biopharmaceutical manufacture.

While the sequencing of the first draft of the human genome created the headlines in 2000, the pace of change throughout the life sciences field continues to be astonishing. At Amersham Pharmacia Biotech we helped drive this pace with continued innovation and commitment to deliver new ways of enabling research. We are well positioned to lead the way in systems for genomics, proteomics and drug screening.

Turnover in 2000 was £603 million, up 12 per cent on a comparable basis, despite a delay in launching two products in our drug discovery business (SNiPer™ for Single Nucleotide Polymorphisms (SNP) analysis and Ettan MALDI-TOF for mass spectrometry ). We halted the decline in the laboratory products area and saw continued strong sales in separations. The benefit of the launch of new products in drug discovery is anticipated for 2001.

Trading profit before exceptional items and goodwill amortisation was £135 million, compared with £134 million in 1999. Our trading margin of 22.4 per cent (1999 – 24.7 per cent) was affected by two principal factors. First, during 2000, we built up our sales and service infrastructure in line with the growth in the emerging markets of Asia and Latin America and the new technology markets in drug discovery, such as mass spectrometry. Second, we continued to invest in defending our intellectual property in patent suits against Applera Corporation. In December we received a US court ruling that our patent on energy transfer dyes had been infringed by their use of the Version 2 Big Dye™, and this case will now proceed to jury trial on the remaining issues including validity later this year.

Our R&D investment increased by 35 per cent to £72 million, resulting in an overall operating profit before exceptional items and goodwill amortisation of £63 million, down 26 per cent. This peak in the rate of growth in R&D investment, highlighted at the time of our interim results, enabled us to take advantage of several opportunities in genomics, proteomics and drug screening. Over the last three years we have increased our investment in R&D by 90 per cent. This investment has enabled us to commercialise a significant number of new products over the last few years and has created a strong technology pipeline from which we plan to launch several new products during 2001 and beyond.

We also completed our investment plans for a global IT infrastructure, consolidation of our US production and research at our state of the art Piscataway, New Jersey site and expansion of our facility in Sunnyvale, California in the US.

During 2000, in preparation for our flotation on NASDAQ, we changed the way in which we report our business results to meet US accounting requirements. We now report by the following three business streams – drug discovery, separations (comprising bioprocess and laboratory separations) and laboratory products. Laboratory separations and laboratory products were previously categorised as research products.

Drug discovery
Our drug discovery business provides high throughput systems to improve the effectiveness of pharmaceutical and academic research and the speed with which new drugs get to market.

Sales in 2000 were £145 million, up 13 per cent. Investments in sales and service infrastructure and in defending our intellectual property, combined with a step-up in R&D, resulted in an operating loss before exceptional items and goodwill amortisation of £35 million compared to a loss of £10 million in 1999.

The Chief Executive's business review continues on the next page >>
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